Hungarian Prime Minister Viktor Orban said the decision was made after two aircraft were not allowed to take off from Tel Aviv and Ireland. This ends almost 66 years of continuous service for the aircraft carrier.

Over 3,700 Malev passengers have been stranded, and the airline is arranging alternative flights, Malév CEO János Berényi told a press conference, according to All Hungary News.

Following an EU ruling against Hungary last month, Malev said its suppliers had lost confidence and started to demand advance payment for services, while the government could no longer provide cash injections.

"This has accelerated the outflow of cash to such an extent, that by today the situation of the airline has become unsustainable," the airline said on Friday.

To make matters worse, Malev was ordered by the EU to return the $390 million worth of illegal state aid it had received between 2007 and 2010, the equivalent of its entire 2010 revenue, Bloomberg reports.

Orban is already plotting Malev's return, but other airlines are already capitalizing on the void it has left: Just seven hours after Malev's announcement, Irish airline Ryanair said it was building a new base in Budapest, The Journal reports.